What is Professional Liability insurance coverage?
Professional liability insurance is a type of business insurance that could help cover Maryland business owners if they are held responsible for a professional error or are accused of negligence.
This insurance can help cover:
- Business mistakes that cause financial harm to a client or customer
- Accusations of inaction, wrongdoing and other kinds of professional negligence
- Misrepresentation of your services
Professional liability insurance could help cover costs in various situations, whether or not you actually made the professional mistake you are accused of making. For instance:
- A Bethesda insurance agent has to pay a lawyer to defend their case in a disciplinary hearing by a professional review board. Professional liability insurance for insurance agents in Baltimore can help cover the legal defense costs needed to defend their business.
- A client discovers that an architect in Baltimore made critical measurement mistakes in their blueprints, causing project costs and timelines to double. They sue the architect for financial losses. Professional liability insurance may help cover costs related to the mistake.
What is the difference between Professional Liability and E&O insurance?
Another common name for professional liability coverage is E&O or errors and omissions insurance. Maryland business owners may use the terms interchangeably, but typically it depends on their industry.
While professional liability and E&O insurance usually provide the same coverage, E&O is mainly used by insurance agents, real estate agents and property managers. There is also a special contractor’s E&O option for construction professionals.
In most other professions, including finance, engineering and law, this insurance is called professional liability. For example, Baltimore-based legal professionals would search for professional liability insurance for lawyers in Baltimore rather than E&O coverage.
Is Professional Liability insurance required in Maryland?
Professional liability insurance is not legally required for most businesses in Maryland. However, business owners in the state may still need this coverage to comply with standards in their industry.
For instance, companies working on state or local government contracts may need professional liability insurance. Maryland healthcare providers may require their employer to have malpractice insurance, a type of professional liability coverage.
Many business owners in Maryland still choose to have professional liability insurance, even when it’s not required, for the following reasons:
Financial protection
Small businesses in Maryland with professional liability insurance may be better financially protected if they make a professional error or are accused of negligence or wrongdoing.
Licenses and permits
The city or county where you work may require proof of professional liability or E&O coverage for certain business licenses, permits and certifications.
Work contracts
Depending on your industry, clients may request a certificate of insurance before agreeing to work with you. You may risk losing out on high-value projects if you don’t have professional liability insurance.
For instance, the City of Baltimore requires emergency professional services consultants to have professional liability coverage of no less than $1 million to secure a government work contract.1
What types of businesses might need Professional Liability in Maryland?
Some business owners consider professional liability insurance standard coverage, including many consultants, advisors, architects and engineers.
However, businesses operating in various industries can benefit from this type of Maryland business insurance.
Many Maryland small businesses risk of making a mistake that causes financial harm or being accused of professional negligence. Professional liability insurance can help business owners resolve these issues quickly to avoid client confrontations and protect their reputations.
For example, suppose a client sues a Silver Spring financial advisor for making a mistake that led them to lose out on significant tax advantages and pay more than they had to. In that case, professional liability insurance could help fix the error or defend against the accusation.
Or, say a real estate agent in Germantown neglects to list unsafe levels of radon detected on a property in a seller disclosure. Errors and omissions insurance can help cover costs related to correcting mistakes or defending their business.
How much is Professional Liability insurance in Maryland?
The cost for professional liability coverage can vary based on a number of factors, including:
- The type of work that you do
- How many employees you have
- The locations where you operate your business
- Your work experience
- How high you set your policy limits
- Your insurance claims history
NEXT makes getting affordable Maryland professional liability insurance fast and easy. You can apply online in about 10 minutes, and our monthly premiums for this type of business insurance cost $45 or less for 52% of our U.S. customers.**
Learn more about professional liability insurance costs.
How NEXT Insurance helps Maryland businesses
NEXT provides professional liability insurance policies for Maryland small business owners and self-employed workers.
It only takes about 10 minutes to get a quote, review your coverage options, choose your policies and download a certificate of insurance.
Start an instant quote online today.
Our team of licensed insurance advisors is standing by to assist you if you have any questions along the way.
